The new tax year is approaching. As always, the start of a new tax year, on 6th April 2025, means there will be several changes to UK tax rules. One of the key changes last year, which impacted a lot of individuals, was the update to the Child Benefit Charge.

How the Child Benefit Charge changed

In previous years, the Child Benefit Charge meant that anyone earning above £50,000 would have to repay any Child Benefit they had received during the year.

As a result, many individuals opted out of receiving Child Benefit if they knew they would exceed the £50,000 threshold. This meant they were able to avoid the inconvenience of repaying it when submitting their self-assessment tax return (SATR).

However, from 6th April 2024, this threshold rose to £60,000.

What does this mean for taxpayers?

• For individuals earning between £60,000 and £80,000, the high-income child benefit to pay will be 1% of the total child benefit received for every £200 earned above £60,000.

• This means that, unless you earn over £80,000, you will be entitled to at least some child benefit!

• Therefore, anyone earning between £50,000 and £80,000 who has previously opted out of receiving child benefit should consider opting back in.

• If you earn between £60,000 and £80,000, you will still need to pay part of the high-income child benefit charge, but this will still be beneficial overall.

• Finally, if you earn between £50,000 and £60,000, this change will be extremely advantageous, as you will not be required to pay any of the high-income child benefit charge.

How Team Gravitate can help

While it is essential to remain compliant, it is also important to ensure you take advantage of all tax opportunities available to you. Identifying these opportunities isn’t always easy, so it’s a good idea to seek professional advice, whether on the issue of the Child Benefit Charge or something else.

The Gravitate team is more than happy to help if you have any questions or need further guidance on how legislative changes like this may affect you.

‍